Goodwill and fair value adjustments related to a foreign operation are treated as ___________ of the foreign operation for the purposes of foreign currency translation.

Question

Quizplus · Accepted Answer

Goodwill and fair value adjustments related to a foreign operation are considered assets and liabilities of that foreign operation. This is because they are part of the net investment in the foreign operation and are translated at the closing rate in accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates.

Goodwill and Fair Value Adjustments Related to a Foreign Operation